Ch. 4 Q3 (BES) Projected 20X1 annual data for Bobcat Company at a budgeted sales

Question

Ch. 4 Q3 (BES) Projected 20X1 annual data for Bobcat Company at a budgeted sales volume of 100,000 units and which manufactures and sells a single product, are shown in the table below Percent of sales Per unit Total Selling price Variable expenses Contribution margin Fixed expenses Operating income $30.00 $3,000,000 1200 1.200.000 18.00 1,800,000 720 720,000 $10.80 $1,080,000 100% 40% 60% 24% 36% Calculate Bobcat Company's 20X1 break-even point in dollars OA. $1,200,000 OB. $1,800,000 C. $1,080,000 O D. $1,142.860

Explanation / Answer

Break Even Point(In units)= Fixed Cost/Contribution per unit=720000$/18$ perunit=40000 units

Break even point in $ = Selling price per unit* Brteak Even Point (in units)

=30*40000=1200000$

=Option A

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